APi (US:APG)2025-07-31 16:54PART I. FINANCIAL INFORMATION Financial Statements APi Group's H1 2025 financial statements show total assets at $8.54 billion, net revenues of $3.71 billion, and operating cash flow of $145 million, with a slight net income decrease Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,798 | $2,658 | | Goodwill | $3,126 | $2,894 | | Total Assets | $8,539 | $8,152 | | Total Current Liabilities | $1,933 | $1,885 | | Long-term Debt | $2,751 | $2,749 | | Total Liabilities | $5,368 | $5,199 | | Total Shareholders' Equity | $3,171 | $2,953 | Condensed Consolidated Statement of Operations Highlights (in millions, except EPS) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $1,990 | $1,730 | $3,709 | $3,331 | | Gross Profit | $615 | $544 | $1,157 | $1,036 | | Operating Income | $143 | $126 | $227 | $226 | | Net Income | $77 | $69 | $112 | $114 | | Diluted EPS | $0.16 | $0.15 | $0.24 | $(0.68) | Condensed Consolidated Statement of Cash Flows Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $145 | $117 | | Net cash used in investing activities | $(140) | $(623) | | Net cash (used in) provided by financing activities | $(101) | $357 | | Net decrease in cash | $(68) | $(154) | - On June 30, 2025, the Company executed a three-for-two stock split via a stock dividend, with all share and per-share amounts restated to reflect this split19120 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A highlights strong revenue growth to $1.99 billion in Q2 and $3.71 billion in H1 2025, driven by acquisitions and pricing, alongside a $1.18 billion liquidity position Results of Operations Q2 2025 net revenues rose 15.0% to $1.99 billion, with H1 revenues up 11.3% to $3.71 billion, though H1 net income slightly declined due to higher SG&A Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenues | $1,990 | $1,730 | 15.0% | | Gross Profit | $615 | $544 | 13.1% | | Gross Margin | 30.9% | 31.4% | -50 bps | | Operating Income | $143 | $126 | 13.5% | | Net Income | $77 | $69 | 11.6% | | Adjusted EBITDA | $272 | $231 | 17.7% | H1 2025 vs H1 2024 Performance (in millions) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenues | $3,709 | $3,331 | 11.3% | | Gross Profit | $1,157 | $1,036 | 11.7% | | Gross Margin | 31.2% | 31.1% | +10 bps | | Operating Income | $227 | $226 | 0.4% | | Net Income | $112 | $114 | (1.8%) | | Adjusted EBITDA | $465 | $406 | 14.5% | - The Safety Services segment's net revenues grew 15.8% in Q2 and 14.7% in H1 2025, with segment earnings margin expanding to 17.0% in Q2 and 16.4% in H1, driven by acquisitions, pricing, and disciplined project selection197198213 - The Specialty Services segment's net revenues increased 13.3% in Q2 and 3.9% in H1 2025, but its segment earnings margin decreased to 11.3% in Q2 and 9.2% in H1, attributed to project mix, rising material costs, and weather199200215 Liquidity and Capital Resources As of June 30, 2025, the company reported total liquidity of $1.18 billion, comprising $432 million in cash and $744 million available under its revolving credit facility - Total liquidity as of June 30, 2025, was $1,176 million, comprising $432 million in cash and $744 million in available borrowings under the Revolving Credit Facility223 Cash Flow Summary - H1 2025 vs H1 2024 (in millions) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $145 | $117 | | Net cash used in investing activities | $(140) | $(623) | | Net cash (used in) provided by financing activities | $(101) | $357 | - During H1 2025, the company repurchased 3,095,573 shares of common stock for approximately $75 million, with a new $1 billion share repurchase program authorized in April 2025229 - In Q2 2025, the company increased its Revolving Credit Facility by $250 million to $750 million and extended its maturity, while also reducing the applicable margin by 75 basis points227235 Quantitative and Qualitative Disclosures about Market Risk The company manages interest rate risk on its variable-rate debt through swaps and mitigates foreign currency risk from its 35% foreign revenues by transacting in local currencies and using derivatives - The company mitigates interest rate risk on its $2,157 million variable-rate 2021 Term Loan using interest rate swaps totaling $1,120 million and a forward-starting swap of $720 million250 - Foreign operations account for approximately 35% of consolidated net revenues, with currency risk managed by primarily invoicing and paying expenses in local currencies and utilizing derivative instruments like cross-currency swaps and forward contracts252253 - The company faces supply chain risks related to price fluctuations and availability of key materials such as copper and steel, as well as increases in energy prices for its vehicle fleet, which could impact profitability on fixed-price contracts255 Controls and Procedures Management concluded that the company's disclosure controls and procedures, as well as internal control over financial reporting, were effective as of June 30, 2025, with no material changes during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025259 - Management concluded that the company's internal control over financial reporting was effective as of June 30, 2025, based on the COSO 2013 framework261 - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting262 PART II. OTHER INFORMATION Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Form 10-K for the year ended December 31, 2024 - The company reports no material changes to its risk factors from those detailed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024263 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company reported no purchases of its equity securities during the three months ended June 30, 2025 - During the three months ended June 30, 2025, the Company did not make any purchases of its own equity securities264 Other Information During Q2 2025, three company directors adopted Rule 10b5-1 trading plans for the pre-arranged sale of common stock, with no other officers or directors adopting or terminating such plans - In May 2025, three directors adopted Rule 10b5-1 trading plans for selling shares of the company's common stock: Ian Ashken (up to 759,000 shares until June 12, 2026), Sir Martin Franklin (up to 2,700,000 shares until March 13, 2026), and Jim Lillie (up to 1,500,000 shares until September 11, 2026)266267268 Exhibits This section lists the exhibits filed with the quarterly report, including amendments to corporate documents, officer certifications, and Inline XBRL data files